William Thien

Towards a More Fair Tax Code. Part III. What To Do About the Unfairness of The Dependent Child Tax Deduction

Posted on: November 29, 2012

In discussing the matter of taxes with various associates and colleagues we began to clash on the matter of deductions for children. My opinion is that the deductions are unfair to single people or those who have perhaps only one child. The deduction taxpayers receive for their children is doubly unfair because they also get to add withholding allowances for their children, so less is taken from their pay check in terms of income taxes throughout the year. They therefore get paid more throughout the year and receive a substantially greater tax return in comparison to mine, yet we are paid the same by our employer.

If I compare the taxes I as a single person pay to that of another colleague who has five children, he makes on average $5,000 to $10,000 a year back on a tax return more than I do, depending upon the year. Round that up to $11,000 a year by including his withholding allowances and he makes then $11,000 a year more than I do. Our employer has decided that we should both be paid the same but the government has given him a raise, a rather substantial raise at that, one that is clearly unfair and merely because he has reproduced.

A chorus of my colleagues in response is that raising children is expensive. But that does not offer a reason as to why I should pay to raise their children or anyone else’s for that matter, and that is in fact what I’m doing. That money they get on their substantially larger tax return has to come from somewhere, and it comes from me and others like me who do not have children. To me that is unfair, perhaps parasitic even, particularly when throughout the year they also make more on their paychecks because they can claim withholding allowances for children. Yet, again we do exactly the same job and our employer has determined that we should be paid the same.

What to me exacerbates the situation is that most of my colleagues send their children to public schools because we have excellent schools where I reside and therefore those who receive the larger tax return also use substantially more government services than I do. Yet still they pay less in taxes, substantially less. Responses were, that it was what people wanted. What people, I replied? “It’s popular,” another colleague explained later. My response to that, simply because something is popular doesn’t mean its right, or fair for that matter. Fascism has been quite popular, even in the context of a democracy. Popular? Really? Clearly, democracy can be mobbish and irrational. Democracy can also be a shrieking, harrowing flock of scavengers.

Popular?! Really?

Then I began to explain to another colleague who is highly learned why what is occurring in terms of the tax code is really socialist or perhaps even communist as it is clearly a redistribution of wealth, a poorly engineered one at that if you can call a redistribution of wealth a good thing. Even worse, said deduction is a redistribution of wealth from someone in the same economic class, from someone who works right next to him. Myself. That’s not what a redistribution of wealth is supposed to be about. A redistribution of wealth isn’t supposed to make someone poor. It’s rather just the opposite. This is the fundamental, gaping flaw in the deduction.The tax code is not even a taking from the rich to pay the poor, the tax code is taking from someone in the lower middle-income bracket and effectively ‘making him poor’ by giving his income right to the guy next to him simply because the guy next to him has a family. The government is making people poor simply because they don’t have a family and others do. That’s not right. But ultimately I see many of those who receive the subject deduction don’t really care where the money is coming from, as long as it is coming from somewhere. And I am to know they are to be wicked if to see it gone.

Another exemplary colleague, and he is, in this ongoing debate claimed that what the government was doing was “social engineering.” To that I say, the government should engineer society on someone else’s dime. I don’t like the way this is turning out, anyway. Many of you don’t either. You’ve said so much yourselves. Shall I expect to hear a change of tune?

But really it’s none of that now is it? It’s not the “popular” sentiment. Nobody is “social engineering.” When you boil it all down, what is really happening is that I’m paying for other people to have sex and reproduce. That at the very least makes the deduction immoral as the burden of the result of that sex is knowingly and willfully transferred to others. Politicians wanting to get elected saw such tax deductions as a way to get elected and now those deductions are written into the tax code. The politicians and their media arm merely feed you the excuse that it is “popular” or “social engineering” to make you feel good about giving it to your fellow Americans and you swallow it like the apple. But popular, not really. Social engineering, doubtful. You give Washington too much credit. And though I am not an overly religious person, the bible has things to say about what is happening.

Each of my debate opponents were either carefully chosen based on the circumstances or approached me with incited commentary, knowing about my public position on taxes and wanting to express their position, to use me as a sounding board or I likewise.

When I look into their eyes during our debates on this particular matter and see the running fear that rises up as they begin to calculate how much less money they would have in their wallets if the government removed the child tax deduction from their income taxes and took away the withholding allowances, and thusly their boats (so you say it’s expensive to raise children, is it? Hmmmmm.), their second homes in the country, their annual extended trips overseas, I conclude I don’t really know if I have the heart to lobby said deduction away. And after all, I may wish to settle down some day myself. Though, I could change my mind.

So, what’s the solution for a single taxpayer like myself with no deductions? I think it is quite clear. I think it is time to raise the standard deduction for single taxpayers with no writeoffs.

I think the standard deduction for single taxpayers should at the very least be raised by adding the standard single household deduction to a multiple of the average number of children in a household in America multiplied by the dependent child deduction. If the average number of children is 2.3 children per household (as an example I found that figure at an online statistics site which I did not verify and am using the figure simply to make a point) and families are receiving a deduction for each of their 2.3 children, for example, then the standard single with no children household deduction should be increased by 2.3 times the standard dependent child deduction plus the single household deduction. If the average number of children per household fluctuates from year to year, so then should the additional deduction offered to single tax payers with no children. In other words, a single tax payer would receive their normal single tax payer standard deduction plus a deduction for 2.3 children. That’s creative, fair tax policy, by the way. You don’t see that coming out of Washington D.C.,.

At this time and because I see no other yet, I believe that is a fair solution. I’d still be paying for everyone else’s children. Those though who want children of their own and don’t have any might be able to afford them with an increase in the single deduction to save up to have some of their own then some day. But for now, it is not possible to save much when they are paying to raise everyone else’s children. Because that’s exactly what they are doing.

As if I don’t already know it, patting themselves on the back for their brilliant observations many have used the excuse during this debate, “raising children is expensive.”

Tell me about it. It’s time for a fair tax code.

Copyright © William Thien 2012

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